POLI 241: Theories of IR II (International Political Economy) Graduate Seminar Fall 2004

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1 POLI 241: Theories of IR II (International Political Economy) Graduate Seminar Fall 2004 Prof. Layna Mosley Dept. of Political Science UNC Chapel Hill Wednesdays, 3:00-5:50pm Gardner 007 Contact Information Office: 307 Hamilton Hall Phone: Office Hours Tues/Thurs, 1:30 to 3:00pm, and by appt. I. Course Overview This seminar explores the interaction between politics and economics in the international system, with an emphasis on the theoretical development of the sub-field of international political economy. We will investigate the effect of international institutions on economic relations, the conditions for cooperation in international trade and finance, and the mutual impact of domestic and international politics. We also will attempt to identify the state of the art in international political economy, meaning that we sometimes will focus more on recent research than on classics. This course is intended to lay the groundwork for future research in the fields of international political economy, international relations, and comparative political economy, as well as to help prepare students for the IPE component of the comprehensive exams in international relations. II. Course Requirements The principal requirement for students is to read thoroughly the assigned works and to come to seminar prepared for discussion. In addition to participating actively in seminar discussions, the requirements for this course are: A. Response Papers: Each student will complete five short (2 to 3 single-spaced pages) response papers. Each paper should be distributed via to all seminar members, and are due at 5:00 pm Tuesdays. These are analytical response papers, analyzing and discussing the required readings for a particular week. While you may provide a short summary of the articles and books, the main task of the paper is critical analysis. Rather than summarize the readings (which your classmates will themselves have done), your paper should focus on what you see as the strengths and weaknesses of the readings; the possible intersections among the readings; and perhaps most importantly what theoretical issues and empirical questions for future research are raised by the readings. The response papers will serve as a starting point for our seminar discussion. You may write papers for any of the substantive weeks during the course; to evenly distribute papers across weeks, we will divide up papers and weeks during the first and second class sessions. These papers will serve as the basis for in-class discussions, and well as presentations by discussion leaders. B. Discussion Leaders: While all students are expected to come to class prepared to discuss each week s readings, we will also have one official discussion leader for each week. Each student will be a discussion leader twice during the semester. The chief responsibility of the discussion leader is to comment on the response papers for a given week: the discussion

2 leader need not present the response papers, as everyone in the class will have received them. Rather, the discussion leader could discuss whether he or she agrees with the writer s criticisms, or propose answers to the writer s questions, or describe how the papers help point to new research questions. Discussion leaders comments are intended to serve as a springboard to a broader seminar discussion, so these comments can be quite brief (5 to 10 minutes). Again, discussion leader duties will be assigned during the first two weeks of the seminar. C. Research Design: Each student will formulate a research question addressing a question in the field of international political economy. The research design (approximately 20 pages, double spaced) should deploy theoretical literature and an empirical puzzle to set up the research question, develop hypotheses, and present a methodology for testing the hypotheses. The research design does not require execution of the research project (e.g. it does not require doing statistical analyses or writing case studies); rather, it focuses on the theoretical development of a project, which might later be turned into a conference paper or article, or might be the basis for a grant or dissertation proposal. To do the research design, you ll need to come up with a research question or puzzle (this is sometimes the most difficult part; keep this task in mind as you read for each week, and ask me if you want to read further on a particular topic); figure out what s been done on the topic or in similar areas, or the ways in which arguments about one set of phenomena could be brought to bear on your question (a literature review); develop a set of hypotheses regarding your research question; and think about how you would test these hypotheses (qualitatively, quantitatively, or formally? With which cases or with what sorts of data?). For general discussions of research design in political science, you may want to consult Keohane, King and Verba s Designing Qualitative Inquiry (Princeton, 1994). Research designs will be presented to the seminar at our last class meeting, on Wednesday, December 1. A draft of your research design should be circulated to the class no later than Monday, November 29. The final, revised version of your research design is due on Monday, December 13. The Final Grade for the course is based upon participation in class discussions, including discussion leader duties (35%), Response Papers (35%), and the Research Design (30%). III. Class Schedule Each of the substantive weeks includes required and supplementary readings. Students are expected to read all required materials carefully, and to come to class prepared to discuss these. The supplementary readings include additional theoretical and empirical perspectives; if a particular topic interests you, or if you want more background when preparing for comprehensive exams, read these materials. Several of the books listed as required readings are available for purchase at the UNC Bookstore; these are marked with an asterisk on the syllabus. You will be assigned all of some books and parts of others. You may decide that you only want to purchase some of these, but you also may want to have these books in your collection. All books marked with an asterisk also should be available at Davis Library. Most of the readings for this course are articles, rather than books. These required readings are available electronically, through Blackboard (under Course Documents, and then under Course Packet ); these are marked [BL] on the syllabus. Blackboard readings are organized by week. If you cannot find a particular article or book, please let me know. The graduate course focuses on theoretical issues in IPE. If you would like more substantive background in IPE, as well as on the development of IPE theory, you may want to consult Thomas Oatley s International Political Economy: Interests and Institutions in the Global

3 Economy (Longman, 2004), or Jeffry Frieden s The World Economy in the 20 th Century (available at I can also provide you with a copy of an undergraduate IPE syllabus which points you toward readings for specific topics. If you would like more background in economic concepts (e.g. comparative advantage, open-economy macroeconomics), you may want to look at Paul Krugman and Maurice Obstfeld, International Economics: Theory and Policy (Longman, 2002, 6 th edition). Week 1: August 25 Course Introduction: Overview of IPE [BB] Jeffry Frieden and Lisa L. Martin, International Political Economy: the State of the Sub- Discipline, April [Also in Ira Katznelson and Helen Milner, Political Science: The State of the Discipline, 2002.] [BB] Robert Gilpin Global Political Economy: Understanding the International Economic Order (Princeton: Princeton University Press), Chapter 1. Supplementary Reading: Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987), Chapters 1 through 3. Week 2: September 1 Public vs. Private: States and Markets *Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time, entire. Supplementary reading: James Caporaso and David Levine, Theories of Political Economy (1992), Chapters 1 and 2. Robert O. Keohane and Joseph Nye, Power and Interdependence: World Politics in Transition (1977; 3 rd edition, 2000). Week 3: September 8 State Power and The International Economy [BL] Daniel Drezner, The Hidden Hand of Economic Coercion, International Organization 57 (Summer), pp {BL] Charles Kindleberger, The World in Depression (Berkeley: University of California Press, 1986 revised edition), Chapter 14 ( An Explanation of the 1929 Depression ). [BL] Stephen Krasner, State Power and the Structure of International Trade, World Politics 28.

4 [BL] Stephen D. Krasner, Global Communications and National Power: Life on the Pareto Frontier, World Politics 43. [BL] Edward Mansfield, The Concentration of Capabilities and International Trade, International Organization 46 (Summer), pp [BL] Jacob Viner, Power Versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries, World Politics 1 (October), pp Supplementary reading: Robert O. Keohane, Problematic Lucidity: Stephen Krasner s State Power and the Structure of International Trade, World Politics 50. Jonathan Kirshner, Currency and Coercion: The Political Economy of International Monetary Power (Princeton: Princeton University Press), chapters 1, 2, 6 and 7. Miles Kahler "The State of the State in World Politics." In Ira Katznelson and Helen Milner, eds., Political Science: State of the Discipline (W. W. Norton). On Sanctions: Daniel Drezner, The Sanctions Paradox: Economic Statecraft and International Relations (Cambridge: Cambridge University Press). Lisa L. Martin, Coercive Cooperation: Explaining Multilateral Economic Sanctions (Princeton: Princeton University Press). Week 4: September 15 The Case for Cooperation in the International Economy [BL] George Akerlof, The Market for Lemons, Quarterly Journal of Economics 54 (August). [BL] Judith Goldstein, Miles Kahler, Robert O. Keohane and Anne-Marie Slaughter, Introduction: Legalization and World Politics, International Organization 54, no. 3 (Summer), pp * Lisa L. Martin, Democratic Commitments: Legislatures and International Cooperation (Princeton: Princeton University Press), Chapters 1 through 4, 7. [BL] Robert Putnam, Diplomacy and Domestic Politics: The Logic of Two-Level Games, International Organization 42 (Summer). [BL] Robert O. Keohane, International Institutions: Two Approaches, International Studies Quarterly 32 (December). [BL] Kenneth Oye, Explaining Cooperation Under Anarchy: Hypotheses and Strategies, World Politics. Supplementary reading:

5 Daniel Drezner, ed Locating the Proper Authorities: The Interaction of Domestic Politics and International Institutions. (University of Michigan Press). Stephan Haggard and Beth A. Simmons, Theories of International Regimes, International Organization 41(3), Summer. Robert O. Keohane, Governance in a Partially Globalized World [2000 APSA Presidential Address], American Political Science Review 95, no. 1 (March), pp Stephen D. Krasner, ed., International Regimes (Cornell University Press), especially essays by Krasner and Ruggie, pp. 1-21; James G. March and Johan P. Olsen, The New Institutionalism: Organizational Factors in Political Life, American Political Science Review. Lisa L. Martin and Beth Simmons, "Theories and Empirical Studies of International Institutions." International Organization, vol. 52, no. 4 (Autumn), pp [Also in Katzenstein, Keohane and Krasner, Exploration and Contestation in the Study of World Politics, Cambridge: MIT Press, 1999]. Helen Milner, Interests, Institutions and Information: Domestic Politics and International Relations (Princeton: Princeton University Press). Mancur Olson Jr., The Logic of Collective of Action: Public Goods and the Theory of Groups (Cambridge: Harvard University Press; revised ed. 1971), pp Week 5: September 22 The Political Economy of International Trade, Part I (International Influences) [BL] Christina Davis, "International Institutions and Issue Linkage: Building Support for Agricultural Trade Liberalization." American Political Science Review 98, no. 1 (February), pp [BL] Judith Goldstein and Lisa L. Martin, Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note, International Organization 54, no. 3 (Summer), pp *Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press), Chapters 1, 4-7. [BL] Andrew Rose, Do WTO Members Have a More Liberal Trade Policy? NBER Working Paper Supplementary Reading: Joanne Gowa, Allies, Adversaries and International Trade (Princeton: Princeton University Press), chs. 1-4.

6 Douglas Irwin, Against the Tide: An Intellectual History of Free Trade (Princeton: Princeton University Press). Timothy McKeown, Hegemonic Stability Theory and 19 th Century Tariff Levels, International Organization, pp Duncan Snidal, The Limits of Hegemonic Stability Theory, International Organization 39 (Autumn). Thomas Schwartz and Mathew McCubbins, Congressional Oversight Overlooked: Police Patrols vs. Fire Alarms, American Journal of Political Science 28. James McCall Smith, The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts, International Organization 54, no. 1 (Winter), pp Week 6: September 29 The Political Economy of International Trade, Part II (Domestic Influences) [BL] Timothy Frye and Edward Mansfield, Timing is Everything: Elections and Trade Liberalization in the Post-Communist World. Comparative Political Studies 37, no. 4 (May), pp *Michael Hiscox, International Trade and Political Conflict: Commerce, Coalitions and Factor Mobility (Princeton University Press). Chapters 1 through 10. [BL] Ronald Rogowski, Political Cleavages and Changing Exposure to Trade, American Political Science Review 81 (4), pp [BL] Kenneth Scheve and Matthew Slaughter, What Determines Individual Trade Policy Preferences? Journal of International Economics 54(2): [BL] Helen Milner and Keiko Kubota, Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries. Forthcoming, International Organization (Winter 2005). Supplementary Reading: Peter Gourevitch, International Influences on Domestic Politics: The Second Image Reversed, International Organization 32 (Autumn). Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca: Cornell University Press). Susan Lohmann and Sharyn O Halloran, Divided Government and US Trade Policy, International Organization 48, no. 4 (Autumn 1994), pp Ed Mansfield and Mark Busch, The Political Economy of Non-Tariff Barriers: A Cross- National Analysis, International Organization 49, no. 4 (Autumn 1995), pp

7 Edward D. Mansfield, Helen V. Milner, and B. Peter Rosendorff, Free to Trade: Democracies, Autocracies, and International Trade. American Political Science Review 94, no. 2 (June), pp Fiona McGillivray Privileging Industry: The Comparative Politics of Trade and Industrial Policy (Princeton: Princeton University Press). Helen Milner, Resisting Protectionism: Global Industries and the Politics of International Trade (Princeton: Princeton University Press). Ronald Rogowski, Trade and the Variety of Democratic Institutions, International Organization 41, no. 2 (Spring), pp Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton: Princeton University Press). Week 7: October 6 Exchange Rate and Monetary Politics, Part I [BL] Jeffrey Frieden, Invested Interests: National Economic Policies in a World of Global Finance, International Organization. *Eric Helleiner, The Making of National Money: Territorial Currencies in Historical Perspective (Ithaca: Cornell University Press), Chapters 1 through 5, 9 and 10. [BL] Beth A. Simmons, International Law and State Behavior: Commitment and Compliance in International Monetary Affairs, American Political Science Review 94, no. 4 (December 2000), pp Supplementary Reading: David M. Andrews, Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations, International Studies Quarterly 38 (June), pp David M. Andrews and Thomas D. Willett, Financial Interdependence and the State: International Monetary Relations at Century s End, International Organization 51 (3). Albert Hirschman, Exit, Voice, and Loyalty (Cambridge: MIT Press). Kathleen R. McNamara, The Currency of Ideas: Monetary Politics in the European Union (Ithaca: Cornell University Press). Kenneth A. Oye, The Sterling-Dollar-Franc Triangle: Monetary Diplomacy , World Politics. Week 8: October 13 (reschedule if necessary; Fall Break begins 5pm) Exchange Rate and Monetary Politics, Part II

8 [BL] William Bernard, Lawrence Broz, and William Clark, The Political Economy of Monetary Institutions, International Organization 56 (October), pp [BL] William Bernhard and David Leblang, Democratic Institutions and Exchange Rate Commitments, International Organization 53 (Winter), pp [BL] David Leblang, 1999.n Domestic Political Institutions and Exchange Rate Commitments in the Developing World, International Studies Quarterly 43 (December), pp *Beth A. Simmons, Who Adjusts? Domestic Sources of Foreign Economic Policy during the Interwar Years (Princeton: Princeton University Press), Chapters 1-4, 8. Supplementary Reading: If you d like a better sense of how the gold standard operated, look at the first few chapters of Barry Eichengreen, Globalizing Capital: A History of the International Monetary System (Princeton: Princeton University Press, 1998, revised edition). Special Issue of International Organization, October 2002, The Political Economy of Monetary Institutions. Thomas Oatley and Robert Nabors "Redistributive Cooperation: Market Failures and Wealth Transfers in the Creation of the Basle Accord," International Organization 52 (Winter): Frances Rosenbluth and Ross Schaap, The Domestic Politics of Banking Regulation, International Organization 57 (Spring). Week 9: October 20 Foreign Direct Investment and Multinational Production [BL] Peter Evans, National Autonomy and Economic Development: Critical Perspectives on Multinational Corporations in Poor Countries. International Organization 25 (3) (Summer, 1971), pp [BL] Nathan Jensen, Democratic Governance and Multinational Corporations: The Political Economy of Foreign Direct Investment. International Organization 57(3). [BL] Stephen Kobrin, Testing the Bargaining Hypothesis in the Manufacturing Sector in Developing Countries, International Organization 57 (Autumn), pp [BL] Quan Li and Adam Resnick Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries, International Organization 57(1), pp [BL] Kenneth Scheve and Matthew J. Slaughter, Economic Insecurity and the Globalization of Production, American Journal of Political Science (October).

9 Supplementary Reading: Theodore H. Moran, Multinational Corporations and the Politics of Dependence. Princeton: Princeton University Press. Theodore H. Moran, Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries (Washington: Brookings Institution Press). Tony Smith, The Underdevelopment of Development Literature: The Case of Dependency Theory, World Politics 31 (No. 2), January, pp Week 10: October 27 The Globalization Debate, Part I (The Causes of Liberalization) [BL] Goodman, John B. and Louis W. Pauly "The Obsolescence of Capital Controls? Economic Management in an Age of Global Markets," World Politics 46, pp [BL] Stephan Haggard and Sylvia Maxfield The Political Economy of Financial Internationalization in the Developing World. International Organization 50, no. 1 (Winter), pp [BL] Dennis Quinn and Carla Inclan, The Origins of Financial Openness: A Study of Current and Capital Account Liberalization, American Journal of Political Science (1997), pp [BL] Michael Tomz, How Do Reputations Form? New and Seasoned Borrowers in International Finance. (Paper presented at 2001 APSA meetings) Supplementary reading: Dennis Quinn, The Correlates of Change in International Financial Regulation, American Political Science Review 91, pp Also see Week 11 supplementary reading. Week 11: November 3 The Globalization Debate, Part II (The Effects of Liberalization) [BL] Alicia Adsera and Carles Boix Trade, Democracy, and the Size of the Public Sector: The Political Underpinnings of Openness. International Organization 56 (Spring), pp [BL] Jude Hays, Globalization and Capital Taxation in Consensus and Majoritarian Democracies, World Politics 56 (October), pp *Layna Mosley, Global Capital and National Governments. (Cambridge University Press, 2003). Chapters 1 through 5 and 7. [BL] Nita Rudra, Globalization and the Decline of the Welfare State in Less Developed Countries, International Organization (Spring), pp

10 Supplementary reading: Philip G. Cerny Globalization and Erosion of Democracy. European Journal of Political Research 36 (no. 1), pp William Roberts Clark and Mark Hallerberg, Mobile Capital, Domestic Institutions and Electorally Induced Monetary and Fiscal Policy, American Political Science Review 94, no. 2 (June), pp Geoffrey Garrett, Global Markets and National Politics: Collision Course or Virtuous Circle? International Organization (Autumn). [Also in Katzenstein, Keohane and Krasner]. David Held and Anthony McGrew, David Goldblatt and Jonathan Perraton Global Transformations: Politics, Economics and Culture (Stanford: Stanford University Press). Peter Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca: Cornell University Press). Stephen Krasner, Sovereignty: Organized Hypocrisy (Princeton: Princeton University Press). Thomas Oatley, How Constraining is Capital Mobility? The Partisan Hypothesis in an Open Economy, American Journal of Political Science 43 no. 3 (October): Roland Paris, The Globalization of Taxation? Electronic Commerce and the Transformation of the State. International Studies Quarterly 47: Dani Rodrik, Has Globalization Gone Too Far? (Washington: Institute for International Economics. Dani Rodrik, Why Do More Open Economies Have Bigger Governments? Journal of Political Economy. Duane Swank and Sven Steinmo, The New Political Economy of Taxation in Advanced Capitalist Democracies, American Journal of Political Science 46(3), pp Erik Wibbels and Moises Arce, Globalization, Taxation and Burden-Shifting in Latin America, International Organization 57 (Winter). Week 12: November 10 Developing Nations and International Financial Institutions *James Vreeland, The IMF and Economic Growth (Cambridge: Cambridge University Press), Entire. *Randall Stone, Lending Credibility: The IMF and the Post-Communist Transition (Princeton: Princeton University Press). Chapters 1 through 4, 9. [BL] Strom C. Thacker, The High Politics of IMF Lending, World Politics 52, no. 1 (October), pp

11 Supplementary reading: Acemoglu, Daron, Simon Johnson and James Robinson, Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income, Quarterly Journal of Economics 117 (4): Robert Devlin, Debt and Crisis in Latin America: The Supply Side of the Story (Princeton: Princeton University Press). Peter Evans, Dependent Development: The Alliance of Multinational, State and Local Capital in Brazil (Princeton: Princeton University Press). Jeffry A. Frieden, Debt, Development and Democracy: Modern Political Economy and Latin America, Erica R. Gould, Money Talks: Supplementary Financiers and International Monetary Fund Conditionality, International Organization 57 (Summer). Stephan Haggard, Pathways from the Periphery (Cornell University Press), Chapters 1, 2 and 10. Journal of Economic Perspectives, Symposium on Growth in Africa, vol. 13, no. 3 (Summer 1999). Articles by Paul Collier and Jan Willem Gunning ( Why Has Africa Grown Slowly?, and Benno J. Ndulu and Stephen A. O'Connell, Governance and Growth in Sub-Saharan Africa ) Thomas Oatley Why is Stabilization Sometimes Delayed? Re-evaluating the Regime Type Hypothesis, Comparative Political Studies 37 (April). Adam Przeworski and James Raymond Vreeland, "The Effect of IMF Programs on Economic Growth." Journal of Development Economics 62, no. 2, pp Adam Przeworski, Michael E. Alvarez, Jose Antonio Cheibub and Fernando Limongi, Democracy and Development: Political Institutions and Well-Being in the World (Cambridge: Cambridge University Press). Week 13: November 17 International Influences Reconsidered Norms, Ideas and Diffusion [BL] Nancy Brune, Geoffrey Garrett and Bruce Kogut The International Monetary Fund and the Global Spread of Privatization. (Also forthcoming in IMF Staff Papers). *Martha Finnemore, National Interests in International Society (Ithaca: Cornell University Press), Chapters 1, 4 and 5. [BL] Walter Mattli and Tim Büthe. Setting International Standards: Technological Rationality or Primacy of Power? World Politics 56 (October 2003), pp [BL] Wayne Sandholtz and Mark M. Gray International Integration and National Corruption. International Organization 57 (Fall), pp

12 [BL] Beth Simmons and Zachary Elkins The Globalization of Liberalization: Policy Diffusion in the International Economy. American Political Science Review 98 (1). Supplementary reading: Judith Goldstein and Robert O. Keohane, Ideas and Foreign Policy: An Analytical Framework, in Goldstein and Keohane, eds, Ideas and Foreign Policy (Ithaca: Cornell University Press, 1993). Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999). John W. Meyer, John Boli, George M. Thomas and Francisco O. Ramirez World Society and the Nation-State, American Journal of Sociology 103, pp Martha Finnemore and Kathryn Sikkink, International Norm Dynamics and Political Change, International Organziation 52 (Autumn 1998). [Also in Katzenstein, Keohane and Krasner]. *Miles Kahler, Rationality in International Relations, International Organziation 52 (Autumn 1998). [Also in Katzenstein, Keohane and Krasner]. *John Gerald Ruggie, What Makes the World Hang Together? Neo-Utilitarianism and the Social Constructivist Challenge, International Organziation 52 (Autumn 1998). [Also in Katzenstein, Keohane and Krasner]. Week 14: December 1 Presentations of Research Designs